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A comment on Tech bubbles are bursting all over the place. Parent comment

Re:Tech bubbles are bursting all over the place by JaimeThompson on Friday May 13, 2022 @08:21PM (#31373908)
They aren't value neutral if you are spending money on buybacks instead of growing / keeping your factories in working order.

See Abbott Labs spending 5 billion on buybacks instead of keeping their infant formula factories up to code.

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Re:Tech bubbles are bursting all over the place by astrange on Friday May 13, 2022 @08:53PM (#31374100)
It shouldn't have stopped them from maintenance though; they just didn't feel like doing maintenance. If a company wants to spend money on something they can always get a loan for it and consider issuing the shares out again later if needed.

The problem with a share buyback is if you do it and then the share price falls again.

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Re:Tech bubbles are bursting all over the place by gruez on Friday May 13, 2022 @09:29PM (#31374280)
>The problem with a share buyback is if you do it and then the share price falls again.

how's that a problem? I get it might seem like you're back to square one if you did a buyback early this year, and the recent market crash brought the share price to before the buyback, but you still permanently:

1. paid out money to the shareholders who sold

2. increased the ownership stake of the remaining shareholders

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Re:Tech bubbles are bursting all over the place by astrange on Saturday May 14, 2022 @01:58AM (#31375430)
If it falls again, it's not value neutral anymore - it's a transfer to whoever sold. So then the complaint that you could've used the money on maintenance against poisoning babies becomes true.
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